ACES booked revenue growth of 7.2% YoY to IDR2.13 trillion in 1Q25. This growth was driven by a 10.64% YoY increase in sales of lifestyle products to IDR930 billion, and home improvement products increased by 5.5% YoY to IDR1.1 trillion in 1Q25. Meanwhile, toy products booked stable sales at IDR72 billion, and consignment sales decreased by 8.38% YoY to IDR34 billion.

ACES’s operating expenses increased by 19.97% YoY to IDR802 billion in 1Q25. This increase was driven by a 26.11% YoY increase in selling expenses to IDR651 billion and a 22.98% YoY increase in general and administrative expenses to IDR223 billion in 1Q25.

In detail, the increase in ACES’s operating expenses was due to an increase in advertising and promotion expenses to IDR41 billion in 1Q25 (vs. IDR18 billion in 1Q24) due to rebranding and initiatives to increase AZKO brand awareness. In addition, increases in salaries and benefits also drive the increase in operating expenses in 1Q25.

ACES’s net profit decreased by 32% YoY to IDR138 billion in 1Q25. This net profit is equivalent to 15% of our FY25F. We assess this condition is reasonable as ACES is a cyclical company. In addition, the decrease in ACES’s net profit was also driven by an increase in financial expenses by 34.26% YoY to IDR42 billion in 1Q25.

We maintain our Buy rating for ACES with the same projection and fair value as ACES’s previous company update at IDR685/share.